What Canada’s strained relations with Saudi Arabia mean for southwestern Ontario

Canada may suspend armoured-vehicle exports to Saudi Arabia. That has some in London — where those vehicles are assembled — again wondering how to balance economics and human rights
By Mary Baxter - Published on October 29, 2018
an building in London, Ontario
In 2014, General Dynamics Land Systems was awarded a government contract to supply the Saudi security forces with armoured personnel carriers from its London plant. (Mary Baxter)

LONDON — Last week, Prime Minister Justin Trudeau signalled that he may suspend exports of light-armoured vehicles to Saudi Arabia in response to the alleged murder of journalist Jamal Khashoggi at that country’s consulate in Istanbul earlier this month. The move would have significant financial consequences for London, where the vehicles are assembled — and Trudeau’s comments have reignited a local debate about whether economic concerns should trump human rights.

“I’m not here to tell the federal government what to do, but I think the importance of the contract that’s currently in place for London workers with General Dynamics should stay,” said London’s mayor-elect, Ed Holder. A former Conservative MP, he was the first chairperson of the Canada-Saudi Business Council and led a 70-person Canadian delegation to the kingdom in April 2016.

In 2014, defence contractor General Dynamics Land Systems was awarded a government contract to supply the Saudi security forces with LAV 6.0 armoured personnel carriers, to be assembled at its London plant. (The contract was originally for $15 billion and 928 vehicles; the CBC reported last month that the order had been reduced to 742 vehicles, and in 2016, the Canadian government issued export permits for only $11 billion worth of equipment. Citing General Dynamics documents it had obtained, the CBC further reported that “delivery of the vehicles is already underway and has been for months.”)

The deal was immediately met with criticism: groups such as Project Ploughshares, a division of the Canadian Council of Churches, argued that Canada shouldn’t be doing business with Saudi Arabia, a country with a poor human-rights record. More calls for the contract’s cancellation, including legal action, have come since 2015, when Saudi Arabia launched a military intervention in the Yemen civil war— Amnesty International has since condemned the kingdom and all other parties involved in the war for “serious violations of international human rights law.”

The apparent murder of Khashoggi has put the deal in the spotlight once again. Trudeau has pointed to the $1 billion in charges that Canada could face if it failed to fulfill the contract, but last Wednesday, he suggested that he was willing to consider the option, saying, “As we get clarity on what actually happened to Jamal Khashoggi, Canadians and people around the world will expect consequences.”

In London, those most closely connected to the delivery of the contract that supports 1,850 local jobs are saying little about the federal government’s deliberations. “We continue to perform on this contract,” said Doug Wilson-Hodge, a General Dynamics spokesperson, via email last week. “We know the Government of Canada is engaged in this matter, and we decline to speculate on their actions.”

A spokesperson for Unifor Local 27, which represents 450 of the plant’s 1,850 workers, did not respond to TVO.org’s requests for an interview. However, in August, after a spat between the two countries that prompted fears the kingdom would cancel the contract, a union spokesperson told BNN Bloomberg that workers were caught in the middle — supportive of the government’s stand on human rights, but hoping to keep their jobs.

Gerry McCartney, CEO of the London Chamber of Commerce, says that job losses at the General Dynamics plant — which, he says, citing company figures, contributes $250 million annually to the London and Middlesex County GDP  — would have a “hugely significant” impact on the region’s economy.

McCartney also points out that Canada currently trades with other human-rights violators. And he says that Saudi Arabia has been making reforms. “It's incremental. It's a country that's far older than ours, and we would like it to be a lot faster, of course, but they don't move at the same speed we do.” Human Rights Watch, however, has criticized the reforms as token efforts.

Suspending or cancelling the export permits could have significant implications not just for General Dynamics — which could opt to close the London plant and shift manufacturing to other countries — but for all Canadians employed in the arms manufacturing industry, says David Perry, vice-president and senior analyst at the Canadian Global Affairs Institute. He notes that the defence industry depends on exports. If the government were to pull permits for political reasons, he says, that could call the industry’s reliability into question.

But not everyone thinks the deal should remain in place. Irene Mathyssen, the NDP MP for London-Fanshawe — where the General Dynamics plant is located — supported the contract in the past, but she now believes it should be cancelled altogether. “We can’t deal with people we can’t trust,” she says.

Mathyssen does say that if the federal government halts the exports, it should immediately move to protect the plant and its employees. “Let's look for new contracts internationally and here at home, and while that is going on, make sure that there is support for those workers, for their families, so that they don't suffer.”

Hamza Shaiban, a spokesperson for the group Yemeni Community in Canada, agrees that cancelling the contract is the right thing to do, noting that there have been reports of Saudi security forces deploying Canadian-made armoured vehicles in operations against civilians in Yemen.

“This doesn’t reflect Canadian values,” Shaiban says.

This is one in a series of stories about issues affecting southwestern Ontario. It's brought to you with the assistance of faculty and students from Western University’s Faculty of Information and Media Studies.

Ontario Hubs are made possible by the Barry and Laurie Green Family Charitable Trust & Goldie Feldman.

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